1. What is the Rental Property Calculator?

The Rental Property Calculator estimates the cash flow of a rental property by considering rental income, expenses, and mortgage payments. It helps investors evaluate the profitability of potential rental properties.

2. How Does the Calculator Work?

The calculator uses the cash flow formula:

Where:

• Rental Income — Total monthly income from rent
• Expenses — All property-related expenses (taxes, insurance, maintenance, etc.)
• Mortgage Payment — Monthly principal and interest payment

Explanation: Positive cash flow indicates the property generates more income than expenses, while negative cash flow means it's costing money each month.

3. Importance of Cash Flow Calculation

Details: Calculating cash flow is essential for real estate investors to determine a property's profitability, assess risk, and make informed investment decisions.

4. Using the Calculator

Tips: Enter all values in dollars. Include all recurring monthly expenses (property management, repairs, vacancies, etc.) for accurate results.

5. Frequently Asked Questions (FAQ)

Q1: What is considered good cash flow for a rental property?
A: Generally, $100-$200 per door is considered decent, but this varies by market and property type.

Q2: Should I include property taxes in expenses?
A: Yes, all recurring expenses including taxes, insurance, HOA fees, and maintenance should be included.

Q3: How does vacancy affect cash flow?
A: You should factor in a vacancy rate (typically 5-10% of rental income) even if the property is currently occupied.

Q4: What's the difference between cash flow and ROI?
A: Cash flow measures monthly income vs expenses, while ROI considers the total return on investment including appreciation.

Q5: Should I include principal payment in cash flow?
A: Yes, the entire mortgage payment (principal + interest) should be included as it affects your monthly cash position.